Urgent Bitcoin Price Warning: Trump Tariffs Threaten Drop to $71K

Is the Bitcoin bull run facing an unexpected roadblock? New market analysis suggests a concerning possibility: Bitcoin price risks plunging to $71,000. This potential downturn is linked to a surprising factor – the impact of Trump’s trade tariffs on the US business outlook. Let’s dive into the details of this developing situation and understand what it could mean for your crypto portfolio.

Why Are Trump Tariffs Pressuring Bitcoin Price?

The connection between Trump’s trade tariffs and Bitcoin might seem indirect, but recent market behavior reveals a clear correlation. When former President Trump announced worldwide reciprocal trade tariffs on April 2nd, the market reaction was telling. Bitcoin experienced a significant drop, falling as much as 8.5% in a single day. Interestingly, traditional markets like the S&P 500 showed more resilience, ending the trading session with a slight gain. This divergence highlights Bitcoin’s sensitivity to macroeconomic uncertainties, particularly those stemming from US trade policy.

Charles Edwards, founder of Capriole Investments, points to “higher than expected” US trade tariffs as a key source of pressure. His analysis indicates that these tariffs are creating uncertainty in the US business outlook, mirroring levels of concern seen during significant economic downturns like 2000, 2008, and 2022.

US Business Outlook: Echoes of Economic Uncertainty

The Philadelphia Fed’s Business Outlook Survey (BOS) is flashing warning signs. This survey, a key indicator of economic sentiment, has dipped below 15 for the first time since early 2024. Edwards emphasizes that while BOS data isn’t foolproof, its current reading is reminiscent of periods preceding major market corrections. Consider these points:

• Historical Parallels: Similar BOS readings were observed in 2000, 2008, and 2022 – years marked by significant economic and market volatility.
• Tariff Impact: The survey reflects business expectations amidst the backdrop of escalating trade tariffs, suggesting a direct link between tariff policy and business confidence.
• Potential Risks: If the “tariff war” intensifies or corporate margins start to erode, the negative pressure on markets, including Bitcoin, could amplify.

The chart shared by Edwards comparing the Philadelphia Fed Business Outlook Survey against the S&P 500 visually underscores this concern. The current BOS trend mirrors patterns seen during periods of heightened economic risk.

Bitcoin Price Levels to Watch: $91K and the $71K ‘Bounce’ Zone

Amidst this tariff-induced uncertainty, Capriole Investments highlights crucial Bitcoin price levels. A key level to monitor is $91,000. According to their market update, a daily close above $91K would signal a strong bullish resurgence. However, failure to reclaim this level opens the door for a potential dip towards the $71,000 zone.

Interestingly, the analysis suggests that a drop to $71,000 might not be entirely negative. Capriole predicts a “sizeable bounce” could occur in this price range. This implies that while a dip to $71K would represent a correction, it could also present a buying opportunity for savvy investors anticipating a market rebound.

Market Analysis: Liquidity as a Potential Lifeline

While the US business outlook and tariff concerns cast a shadow, there’s a potential silver lining for Bitcoin and the broader crypto market: global liquidity. As previously reported by Crypto News Insights, increasing global liquidity could act as a tailwind for risk assets like cryptocurrencies.

In the US, there are signals that the Federal Reserve is beginning to ease its tight financial policy. The possibility of a return to quantitative easing (QE) is being discussed, although the timing remains uncertain. Edwards raises the pertinent question: “How long until the Powell printer starts humming?”

Adding to this optimistic outlook, analyst Colin Talks Crypto points to an anticipated “influx” in the M2 money supply. Historically, expansions in M2 money supply have been correlated with significant Bitcoin price appreciation. A comparative chart suggests a potential Bitcoin price rebound could materialize as early as May, coinciding with the expected M2 influx.

Key Takeaway: While short-term Bitcoin price risks are elevated due to tariff-related concerns, the potential for increased liquidity and M2 money supply growth offers a contrasting bullish narrative for the medium to long term.

Navigating the Uncertainty: Actionable Insights

The current market landscape demands a cautious yet informed approach. Here are some actionable insights to consider:

• Monitor Key Levels: Keep a close watch on the $91,000 and $71,000 Bitcoin price levels. A daily close above $91K could signal renewed bullish momentum, while a dip to $71K might present a buying opportunity.
• Track Macroeconomic Data: Stay informed about US trade policy developments, the Philadelphia Fed Business Outlook Survey, and indicators of global liquidity and M2 money supply.
• Manage Risk: Given the uncertainties, consider implementing risk management strategies such as portfolio diversification and position sizing.
• Conduct Your Own Research: Remember that this analysis is for informational purposes only and not financial advice. Always conduct thorough research before making any investment decisions.

Conclusion: A Moment of Caution, But Hope Remains for Bitcoin

The convergence of Trump’s tariffs and a potentially softening US business outlook has introduced a layer of complexity to the Bitcoin market. While short-term Bitcoin price risks are undeniable, particularly the threat of a drop to $71,000, it’s crucial to maintain a balanced perspective. The potential for increased liquidity and historical patterns associated with M2 money supply growth offer reasons for optimism. As always, navigating the crypto market requires vigilance, informed decision-making, and a long-term vision. Will Bitcoin weather this tariff storm and bounce back stronger? Only time will tell, but staying informed and prepared is your best strategy in these dynamic times.

Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.